Privately owned Amalgamated Bank of Chicago, founded here by a union in 1922 and with long ties to organized labor, is being sold to a New York institution with a similar name and history.
The buyer is Amalgamated Financial, the holding company for New York’s Amalgamated Bank, which announced the transaction Wednesday. The $98.1 million sale is expected to close by year-end.
While Chicago has lost many of its homegrown banks to out-of-state buyers, this deal brings together partners with a common bond. Both were founded within a year of each other by the Amalgamated Clothing Workers of America, now called Workers United. Despite the common heritages, the banks have not been affiliated.
“It’s an easy swap of the names. They can just take out the ‘of Chicago,’” said Robert Wrobel, chairman and CEO of Amalgamated Chicago.
Wrobel said the sale will give his customers access to more services but with a partner still committed to labor unions and social justice. “I hope it will be a smooth transition. We are certainly like-minded,” he said.
Amalgamated Chicago has assets of $950.1 million. Wrobel said unions and the Chicago Federation of Labor constitute about 15% of its ownership. The CFL and several unions involved in the bank also have ownership stakes in the Chicago Sun-Times.
Private investors mostly bought out the clothing workers union in the 1960s, but the bank brought more labor groups into ownership in 2003.
Amalgamated New York is several times bigger, with assets of $6.6 billion, and Workers United owns about 40% of its shares. The bank’s clients include unions, political groups and nonprofits.
“Both institutions have been successful community staples for almost 100 years,” said Lynne Fox, board chair at Amalgamated New York. “Our new organization will enable us to build on that legacy, to expand America’s socially responsible bank and to advance positive social change.”
Amalgamated Chicago for years had a prominent downtown office, but it struggled as larger banks gobbled up others and expanded branch networks. It owned its headquarters at State and Monroe, a building it sold in 2015 when it moved to rented space at 30 N. La Salle St. Its only other branch is in Warrenville.
“We have been happy to stay under the radar and serve our market,” Wrobel said.
He said the bank saw profits squeezed because of low interest rates and challenges posed by COVID-19. Wrobel said the bank avoided layoffs during the worst pandemic shutdowns and paid about 40% of its staff to stay at home for a few weeks and check in on occasion.
The sale will result in a few job losses, but less than would occur if a local competitor bought the bank, Wrobel said. Federal data show Amalgamated Chicago with 167 full-time equivalent workers.
Wrobel said he has been with the bank since 1972. He and President James Landenberger have agreed to stay on as consultants to the combined company through the end of 2022.
Priscilla Sims Brown, president and CEO of Amalgamated New York, will lead the combined company once the sale closes. She said the banks have identified “key areas of growth and opportunity that we’re ready to start collaborating on.”
Shares of Amalgamated Financial ended Tuesday’s trading at $13.60. Over the last 12 months, the shares have gained about 28%.